February 25, 2013
A survey run by the Department of Internal Affairs has revealed a social enterprise sector in New Zealand which is relatively mature and diverse.
“Social enterprises in this country are operating in a wide range of industries, have a range of approaches to supporting their many and varied missions, and serve many different types of beneficiaries,” says Senior Policy Adviser Diana Suggate.
“While many survey participants have been operating for more than ten years, we are aware that there is a growing interest in the potential to grow the social enterprise movement,” she says.
For the purposes of the survey, “social enterprise” was defined as an organisation which has a social, cultural, or environmental mission, that derives a substantial portion of its income from trade, and that reinvests the majority of its profit/surplus in the fulfilment of its mission.
Diana said the survey showed most social enterprises trade in their local area and focus on benefiting families, young people and other social groupings, although around 15 per cent focus on environmental causes.
Highlights from the survey
- Most social enterprises work in education and training (43 per cent), social assistance services (22 per cent), recreation and sport (17 per cent) and arts and heritage (15 per cent).
- Charitable trusts make up 53 per cent of organisations in the sector; 37 per cent are incorporated societies, and 7 per cent are limited liability companies.
- Around five per cent of the organisations that responded to the survey are affiliated with Maori authorities. This can be through a marae, an iwi organisation, having a Maori organisation as a shareholder; or having an informal association with a hapu or iwi.
- In addition to income from sales, government contracts provide significant income for 40 per cent of the organisations. Grants and donations are also important.
“Challenges faced by the sector include a more difficult trading environment caused by the economic downturn, and the need for funding to support development and growth,” Diana says.
Other issues social enterprises contend with include changing market conditions; increased competition; demographic change; availability and capability of workers; compliance costs; governance and management issues; and lack of capacity for growth.
“Particularly interesting for us was the finding that said around 65 per cent of the organisations felt they could benefit from external advice, particularly with developing marketing strategies and training in management skills,” Diana says.
Diana said government interest in social enterprises hinged on the potential for these organisations to both boost a local economy and tackle social, cultural and environmental issues.
“The report provides a basis for ongoing investigation into social enterprises and will inform policy development about this important sector,” Diana says.
A copy of the report summarising the survey findings is available on the Department of Internal Affairs’ website.